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Information Technology Project Management. Buying Packaged Software: RFPs and Vendor Selection. Why create software when you can buy it?. Many times, the best solution is to buy packaged software Often begins with the development of a Request for Proposal (RFP)
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Information Technology Project Management Buying Packaged Software: RFPs and Vendor Selection
Why create software when you can buy it? • Many times, the best solution is to buy packaged software • Often begins with the development of a Request for Proposal (RFP) • Detailed list of questions submitted to vendors RFP
What Should an RFP Contain? • Key dates in the proposal process • RFP release, proposal due date, proposal evaluation, and so forth • Contact information • Who the vendor may contact and how communication should be done • Information about your business and your requirements
Criteria for Evaluating Vendor Software Packages • Financial viability of vendor • Other vendor characteristics • Contract terms and conditions • Opinions of other users of the package • Package characteristics
Financial Viability of the Vendor • Does the vendor have sufficient capital/surplus to meet its on-going obligations and to absorb any unexpected financial losses? • Does the vendor have any contingent liabilities (e.g., lawsuits) that could adversely affect its financial condition? • Has the vendor achieved profitability from its operations? • Is there a concentration of revenue in one or relatively few customers?
Other Vendor Characteristics • Does vendor provide timely on-site and/or telephone support? • Does vendor track user questions/problems? • Does vendor adequately test new products and releases? • Does vendor have sufficient knowledgeable staff? • Does vendor provide quality training and documentation?
Contract Terms and Conditions • If source code is not a deliverable, will it be maintained at a third party location (e.g., bank vault), and be made available in the event the vendor goes out of business? • Is the timeframe within which the vendor is required to respond to problems/questions clearly defined? • Is the extent of vendor support, training, and documentation clearly defined?
Contract Terms and Conditions cont’d • Is the timetable for all deliverables and payments clearly defined? • Has a favorable relationship between deliverables and payables been negotiated? • Are all costs clearly defined? • Are there penalties if contractual agreements are not met by the vendor? • Does the contract allow for in-house use of the package for acceptance testing purposes prior to purchase?
Opinions of Other Users of the Package • How satisfied are they? Would they purchase it again? • How responsive is the vendor to problems? • Is the system easy to use? • What kind of conversion/implementation problems were encountered? • How difficult is it to interface the package with existing systems? • What other products were considered and why did they select this one?
Package Characteristics • Does it provide the needed functionality? • Is it easy to use? • Is its design flexible enough to allow changes? • Does it have good documentation and help screens? • Does it use current but proven technology for which support is available? • Does it include appropriate control features?
Pros Cons Pros and Cons of Packaged Software
Remember: Customizing Packaged Software Drives Up Total Costs 10 8 6 TOTAL IMPLEMENTATION COSTS 4 2 0 0.5 1 2 3 4 5 % LINES OF CODE CONVERTED
Project Management Challenges Remain • Just because you buy software or enter into an outsourcing arrangement doesn’t mean that you can count on the vendor to manage the project • Requirements still have to be determined and system still have to be implemented along with accompanying organizational changes . . . And these are the two key areas where project often go awry • The same project management principles apply
